Land Securities post results above expectations

Land Securities PLC posted a 15.7 pct hike in interim pretax profits, above markets expectations, and said its adjusted diluted net asset value increased 4.0 pct to to 1264 pence. For the six months to September 30, the property group, posted a pretax profit of 181.7 mln against, against 157.1 mln previously.

Pretax profits for the half were expected to come in at around 173 mln stg. It also lifted its dividend by 4.2 pct to 9.9 pence. Analyst had pencilled in a a rise in the interim dividend from 9.5 to around 10.0 pence.

It added during the period the continued strong performance in retail portfolio substantially offset the impact of weak Central London office market.

Peter G Birch, Chairman, said: 'We have made good progress across all areas of our business in the period under review. Our asset and property management activities have resulted in a 2.0 pct increase in value of the total investment portfolio; the Bullring, Birmingham opened amid much fanfare; we delivered the first phase of White City to the BBC and we agreed terms with the Department for Work and Pensions for the extension to our existing contract to include the former Employment Services estate. These are notable successes in difficult market conditions.'

Referring to Land Securities Trillium, it said the unit continues to perform strongly and is now making a 'robust' contribution to group profits. In the first six months, it generated income of 342.1 mln, some 15 pct up on the equivalent period last year.

This growth in revenue was generated from the existing Department for Work and Pensions (DWP) and BBC contracts and represents uplifts in both the underlying accommodation charge and the provision of additional space and capital expenditure projects.

It added retail and retail warehouse assets, which now represent 52.3 pct of its total investment portfolio, produced a 5.9 pct uplift in value and this performance 'more than outweighed' the negative performance of 2.9 pct for its central London offices which represents 38.4 pct of its portfolio.

In the like-for-like portfolio, retail assets have shown good growth with a 5.2 pct uplift in value as a result of both strong investment demand and rental growth. Retail warehouses have shown the best performance, with a 6.3 pct increase over the period.
In central London offices, values overall have experienced a decline of 1.1 pct and it said, in the short term, the outlook continues to be difficult for the City.